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A model for economic planning and analysis for the brazilian economy

Guilhoto, Joaquim José Martins (1986): A model for economic planning and analysis for the brazilian economy. Published in: University of Illinois

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In this work a general purpose multisectoral economy-wide model, solved for growth rates, is constructed for the Brazilian economy.

In constructing the Brazilian model, the ORANI model for the Australian Economy was chosen as the starting point and was modified in a way that it can reflect and can be used to study the Brazilian reality.The main differences between both models are that in the Brazilian model:

a)A special treatment is giving to the government sector;

b)The demand for household consumption is broken down by different income groups, and an equation linking the workers income with their expenditure is introduced; allowing in this way for the study of income distribution problems;

c) An industry by industry framework is used, opposing to an industry by commodity framework used in the ORANI model;

d) Prices are assumed to be formed through a mark-up price theory, while the ORANI model assumes that prices are formed by maximizing profits.

The Brazilian model is constructed for: a) 21 industries; b) 3 types of primary factors (3 categories of labor, fixed capital, and agricultural land); c) one type of other costs; d) 2 sources of products (domestic and imported); e) 6 types of product use (inputs to current production, inputs to capital formation, commodity flows to household consumption, exports, government demands, and other demands); and f) 3 income groups. The model also presents a detailed specification for trade margins and taxes.

The basic input-output data used in the model refers to the 1975 input-output matrices for the Brazilian economy.

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